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01/09 23:07
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call and Q&A highlight strong financial performance, with record growth in monthly active users and credit portfolios. The reduction in seller fees and free shipping strategy in Brazil have positively impacted engagement and GMV growth. AI usage in marketing and strong advertising revenue growth further boost sentiment. Despite stable NPLs, improved early delinquencies and profitability in credit portfolios are positive signs. While management was non-committal about expanding the shipping strategy, overall sentiment remains positive, suggesting a stock price increase of 2% to 8%.
Revenue Revenues grew over 30% year-on-year, reflecting strong financial performance and consistent execution.
Income from Operations Record income from operations of $825 million, showcasing disciplined investments and long-term ambitions in commerce, fintech, and advertising.
Advertising Revenue Advertising revenue grew 38% year-on-year, driven by the integration with Google Manager and positioning Mercado Ads as a strategic partner for brand-focused advertisers.
Monthly Active Users of Mercado Pago Monthly active users reached 68 million, reflecting rapid user growth and increasing engagement across the ecosystem.
Assets Under Management Assets under management more than doubled year-on-year, indicating strong traction in fintech services.
Credit Portfolio Credit portfolio surpassed $9.3 billion, growing by 91% year-on-year, with stable NIMAL and improved credit quality metrics.
Credit Card Business Issued 1.5 million new cards in Q2, with strong asset quality and enhancements to credit models, leading to improved cohort profitability.
Advertising revenue: Grew 38% year-on-year. Integration with Google Manager launched, positioning Mercado Ads as a key strategic partner for brand-focused advertisers.
Brazil market: Lowered free shipping threshold for the third time in 5 years, attracting new users, increasing engagement, and expanding assortment. Accelerated GMV growth in June.
Mexico market: GMV growth accelerated sharply, with the fastest pace of items sold in almost 2 years. Strong performance across 1P and cross-border businesses.
Revenue growth: Revenues grew over 30% year-on-year, with record income from operations of $825 million.
FinTech services: Monthly active users of Mercado Pago reached 68 million. Assets under management more than doubled year-on-year. Credit portfolio grew by 91% year-on-year to $9.3 billion. Issued 1.5 million new credit cards in Q2.
E-commerce strategy in Brazil: Lowered free shipping threshold to bring offline retail online, removing frictions and enhancing value proposition.
Free shipping threshold adjustments in Brazil: Lowering the free shipping threshold for the third time in 5 years could impact profitability if not offset by increased user engagement and GMV growth.
Credit portfolio growth: The credit portfolio grew by 91% year-on-year, surpassing $9.3 billion. While this indicates strong growth, it also exposes the company to higher credit risk, especially if economic conditions deteriorate.
Advertising revenue dependency: Advertising revenue grew 38% year-on-year, but reliance on advertising as a revenue stream could be risky if advertisers reduce spending during economic downturns.
Expansion in Mexico: Accelerated GMV growth and increased items sold in Mexico are positive, but rapid expansion could strain operational resources and supply chain capabilities.
Credit card issuance: Issuing 1.5 million new credit cards in Q2 increases exposure to credit risk, particularly in volatile markets like Brazil and Mexico.
Revenue Growth: MercadoLibre expects continued revenue growth, building on the over 30% year-on-year increase reported in Q2 2025.
E-commerce Expansion: The company is focusing on reducing frictions in online retail, such as lowering the free shipping threshold in Brazil, which is expected to attract new users and increase engagement.
Advertising Revenue: MercadoLibre anticipates further growth in advertising revenue, supported by the integration with Google Manager and positioning Mercado Ads as a strategic partner for brand-focused advertisers.
FinTech Growth: The company projects continued growth in its FinTech services, with monthly active users of Mercado Pago increasing and assets under management doubling year-on-year. The credit portfolio is also expected to expand, supported by strong asset quality and enhancements to credit models.
Credit Card Business: MercadoLibre plans to issue more credit cards, building on the 1.5 million new cards issued in Q2 2025, and aims to improve cohort profitability further.
The selected topic was not discussed during the call.
The earnings call summary reveals strong revenue growth, successful e-commerce expansion, and positive developments in FinTech and credit card businesses. Despite some uncertainties in Argentina and a lack of specific guidance, overall financial health and strategic moves indicate a positive outlook. The Q&A section highlights operational efficiencies and profitability in older credit card cohorts, further supporting a positive sentiment. The company's strategic investments and market share gains in Brazil, alongside ongoing AI initiatives, add to the optimism. These factors suggest a likely positive stock price movement over the next two weeks.
The earnings call and Q&A highlight strong financial performance, with record growth in monthly active users and credit portfolios. The reduction in seller fees and free shipping strategy in Brazil have positively impacted engagement and GMV growth. AI usage in marketing and strong advertising revenue growth further boost sentiment. Despite stable NPLs, improved early delinquencies and profitability in credit portfolios are positive signs. While management was non-committal about expanding the shipping strategy, overall sentiment remains positive, suggesting a stock price increase of 2% to 8%.
The earnings call highlights strong financial performance with rapid revenue and user growth, improved credit portfolio, and optimistic guidance. Despite competitive pressures and regulatory challenges, the company is well-positioned for long-term growth, especially in Argentina. The Q&A section reveals positive sentiment towards market share gains and margin sustainability. However, the lack of a share buyback program and unclear responses on some financial drivers slightly temper enthusiasm. Overall, the positive momentum and strategic investments suggest a likely stock price increase of 2% to 8% in the short term.
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